WiseTech Global Limited (WTC) has reported a strong financial performance for the fiscal year ending 30 June 2024, with the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) rising by 28% to $495.6 million, exceeding market expectations.
The company’s EBITDA margin improved to 48%, outperforming its own guidance, and set the stage for a positive outlook for FY25. Understandably, investors are reacting positively to the news this morning with shares up 19%.
Revenue for the year increased by 28% to $1.04 billion, driven primarily by the robust growth of its flagship product, CargoWise, which saw a 33% revenue increase. This performance was bolstered by both organic growth and strategic acquisitions, which contributed significantly to the company’s top line. Despite the positive revenue trend, the result was marginally below the market estimate of $1.06 billion, reflecting the challenges of aligning rapid expansion with market forecasts.
Net income rose by 24% year-on-year to $262.8 million, while underlying net profit after tax (NPAT) increased by 14% to $283.5 million. The company’s recurring revenue, a key indicator of its business stability, reached 97% of total revenue, up from 96% the previous year. This underscores WiseTech’s success in building a resilient revenue model based on long-term customer relationships and recurring income streams.
Looking forward, WiseTech has issued a positive forecast for FY25, expecting EBITDA to grow between 33% and 41%, reaching a range of $660 million to $700 million. The company also anticipates revenue growth of 25% to 30%, with total revenue projected to be between $1.3 billion and $1.35 billion. This guidance is particularly notable as it exceeds the average analyst estimate of $652.2 million for EBITDA and $1.32 billion for revenue, signaling strong confidence in continued business momentum.
The outlook is further strengthened by WiseTech’s strategic initiatives, including the upcoming releases of CargoWise Next, ComplianceWise, and Container Transport Optimization in FY25. These innovations are expected to drive significant value for customers, enhancing the company’s competitive edge in the global logistics software market.
Moreover, WiseTech’s focus on cost efficiency is evident in its company-wide program that has already delivered $40 million in annual savings, with an expanded target of $50 million. This discipline in managing costs, combined with the anticipated tailwind from foreign exchange and a favorable product mix, positions the company to achieve a full-year EBITDA margin of 51%-52% in FY25.
The company’s ability to generate robust margins while investing in future growth initiatives sets it apart as a formidable player in the industry. As it continues to expand its product offerings and deepen its market penetration, WiseTech appears well-positioned to sustain growth trajectory and remains a high quality company.
As a reminder, WTC’s inclusion in the ASX Growth Portfolio is based on fundamentals such as profitability and valuation, and the latest set of results are unlikely to see BRG removed from the portfolio in the September rebalance.
